Caffé Nero is a successful family-run coffee house business, founded in 1997. Since then, it has been growing significantly fast and in a span of almost 20 years, while starting out as an only UK based company, it has now expanded abroad, including the United States, United Arab Emirates and several European countries. As internationalisation has proven to be a successful step and Caffe Nero is now one of the leading UK coffee house operators in the world with over 600 stores worldwide, it is considering expansion to either Canada, Italy or Qatar for the purpose of accessing more efficient production. While all of these options seem reasonable, initial analysis must be made to determine the most suitable one. After first look, Canada seems …show more content…
One of the main benefits of opening Caffe Nero in this area, is the fact that not many coffee shops of that type are running in Italy. Therefore, the initial demand can turn out to be high as people will consider trying it out. Then again, Starbucks is ahead of Caffe Nero and will be launching its first shop in Milan in the beginning of 2017 , thus eliminating the uniqueness factor for Caffe Nero, meaning demand might not be as big as it could have been if the stores were introduced in Italy before Starbucks, but it would still be recognised as something new and people, who turn out to be disappointed in Starbucks, would most likely test out also Caffe Nero production in hopes of a better quality. Furthermore, Caffe Nero serves espresso-based coffee, and its philosophy is ‘Premium Italian coffee’. This might be more attractive to Italians compared to Starbucks, as they tend to strictly follow their traditions when it comes to coffee. What is more, Italy is in European Union, so policy of launching a new business would not differ enormously from other European Union countries, unlike Canada, where its policy, exchange and tax rates as well as shipping costs would have to be taken into consideration. Yet Italy is a rather risky place for opening a business like Caffe Nero due to its strong coffee culture. Italians have opinionated views on almost everything coffee related, including …show more content…
First and foremost, as an important advantage, it is crucial to mention that in 2022, Qatar will be hosting FIFA World Cup. Not only Caffe Nero shops would already be built and running by then, but also high demand would be guaranteed for the first couple of years due to increase in tourism for the sake of such a large-scale event. Brand recognition by travellers will ensure successful Caffe Nero launch and will help earn back the investment due to high sales. Besides, by the end of FIFA, locals will have adapted to the previously introduced shops. Furthermore, although demand will most likely decrease with time after FIFA, it will not vanish completely. Reasoning behind this would be success in Costa Coffee market in Qatar. According to socialbakers.com, relative fan base growth for Costa Coffee is +3.55%, implicating that coffee market is alluring to customers. Hence, it can be concluded that regardless the contrasting culture and religion, people are still interested in coffee shops as it is a relatively new industry in this region, arising a great opportunity for Caffe Nero. Market saturation is, supposedly, one of the push factors why Caffe Nero is discussing expansion overseas. In the United Kingdom, there are plethora of coffee shops and a company can only achieve further growth